SINGAPORE – Rents for both Housing Board flats and condominium units continued to rise in October, while rental volume grew for the second month running, according to flash data from real estate portal SRX Property released on Wednesday (Nov 11).
HDB rental volumes rose 13.9 per cent month on month to an estimated 1,734 units in October, from 1,523 units the month before.
Rental volumes for condominiums also climbed, by 6.3 per cent month on month. An estimated 4,409 units were leased in October, compared with 4,148 units in September.
Ms Christine Sun, head of research and consultancy at OrangeTee & Tie said the increase in rental volume could partly be attributed to the new restrictions on developers re-issuing options to purchase (OTPs) announced on Sept 28.
Under the terms of a standard OTP, buyers of new private homes have three weeks to book their right to purchase a property from a developer in return for a cash downpayment, which is up to 5 per cent of the price of the unit. If the buyer does not exercise the right to buy, he may forfeit 25 per cent of the booking fee.
But some developers had been reissuing OTPs to buyers, giving them more time to line up the funds needed to make the purchase and avoid paying the additional buyer’s stamp duty (ABSD).
“As most buyers have not been granted an extension of their OTPs, some have sold their homes to avoid paying the ABSD when they purchased a new condominium. They have subsequently rented a unit while they wait for the completion of their new home,” Ms Sun said.
Meanwhile, HDB rents inched up 0.7 per cent from September, rising for a fourth straight month. They are up 0.8 per cent year on year but still down 13.7 per cent from their peak in August 2013.
Condo rents edged up 0.3 per cent from September, also climbing for the fourth consecutive month. They are up by the same rate year on year but still 16.8 per cent lower than their the peak in January 2013.
Year on year, rental volumes for HDB flats are still down by 12.1 per cent, and 8.9 per cent lower than the five-year average volume for the month.
As for condos, the total number of leases is 4.1 per cent lower than October 2019, but 5.8 per cent higher than the five-year average volume for the month.
Ms Sun noted that there is still considerable uncertainty in the economy and the employment outlook remains weak for many sectors.
“The global economic weakness may necessitate more job cuts in the coming months. A further reduction in foreign employment will continue to impact the leasing market adversely,” she said.
“Therefore, the rental volume may be slightly lower in 2021, dipping about 5 per cent year-on-year. Rents may dip around 2 to 4 per cent next year.”
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